THE Welsh Assembly must hold an inquiry into the payment of a £1m grant to a Caernarfon brake manufacturer, politicians said last night.

THE Welsh Assembly must hold an inquiry into the payment of a #1m grant to a Caernarfon brake manufacturer, politicians said last night.

And the Department of Trade and Industry (DTI) should outline its inquiries into former Friction Dynamics boss Craig Smith, say Caernarfon MP Hywel Williams and AM Alun Ffred Jones.

They have accused Economic Minister Andrew Davies of complacency over his handling of the company, which collapsed with #8m debts.

In a joint statement, Mr Williams and Mr Jones call on the the DTI to "state clearly that they are conducting an inquiry into the business affairs of the companies controlled by Mr Craig Smith and his family."

They say: "We must also question a situation where one company, which owed money to its own workers, under Mr Smith's control runs up massive debts while other companies under his or his family's control, which traded with Friction Dynamics, remain solvent."

The Plaid politicians have also called on Mr Davies to hold an immediate inquiry into the #1m grant from the Assembly.

He wrote to Mr Jones on September 24, 2003, saying there was no need to investigate the matter as all grant conditions "had been met." Mr Jones said: "Such complacency is unacceptable and I intend to pursue the matter further with Andrew Davies at the earliest opportunity."

None of the 86 T&G union members, found at a Liverpool tribunal to have been unfairly sacked by American boss Craig Smith two and a half years ago, are likely to get any compensation. The same applies to 96 other workers sacked when the company went into administration last August.

Mr Williams and Mr Jones are also calling on the Government to amend the Industrial Relations Act of 1999 and to do away with the eight-week rule which allowed Mr Smith to walk away from negotiations to solve the original dispute after eight weeks.

Mr Williams said: "This is a discredited piece of legislation and it is a shame that New Labour members have sat on their hands and done nothing except murmur a few words of condolence to those affected.